News Analysis: Egyptian interim gov't faces chronic challenges

CAIRO, March 1 (Xinhua) -- Egypt's newly-appointed short-term cabinet led by Ibrahim Mahlab, which took office on Saturday, is facing a heavy legacy of challenges left over by its predecessor.

The former government of Hazem al-Beblawi left behind a wave of strikes held by public transport workers, textile workers, garbage collectors and health staff, who demanded service improvement and higher wages.

Security, economy, investment and tourism are all related to terrorism, which has been growing since the ouster of former President Mohamed Morsi by the military last July. Most terrorist attacks were claimed by Ansar Bayt al-Maqdis, an extremist Sinai-based group reportedly loyal to the deposed Islamist president.

The last terrorist blast in mid-February targeted a tourist bus in South Sinai's Taba resort for the first time since 2005. The accident killed three tourists from South Korea, worsening the already-faltering tourism in the country.

It seems that Egypt's "chronic" issues are too difficult to be solved by Mahlab's short-term government before the presidential elections slated for mid-April.

Mahlab kept as many as 20 ministers from the outgoing cabinet, including ministers of foreign affairs, information, petroleum, culture, tourism, transportation and environment.

"We do not expect a dramatic change by the new government, which is required to keep things going smoothly and without problems until the elections are peacefully held," said Gamal Salama, head of the political science department at Suez University.

Restoring security may require long-term plans that could take years and several governments as the past three years witnessed the removal of two presidents, a resultant political division, economic recession, and the long-standing corruption.

"The security situation, which is a responsibility of the police and the military, is usually out of the prime minister's control," Salama said.

According to a recent Finance Ministry report, investments in Egypt have declined by 7.3 percent this year, and the growth rate of gross domestic product has sharply dropped by 60 percent.

However, Mahmoud Bakry, executive editor-in-chief of a local newspaper, is more optimistic about Mahlab's government, who served as housing minister in the former cabinet.

"Any observer could see that Mahlab, as a housing minister, was very active and he managed to gain the trust of the people and the political leadership," he said, expecting the same Mahlab spirit on the cabinet.

Bakry cited tourism recession, violence and terrorism, declining foreign currency reserves and western pressures as major obstacles ahead of Mahalab and his short-term cabinet.

In his first statement as new prime minister on Tuesday, Mahlab vowed that his government will work on maintaining security and "crushing terrorism."

The new 32-minister government replaced its 37-member predecessor, with 10 ministries merged into five in order to minimize expenditure, according to Bakry.

The turmoil-stricken country's ailing economy is reflected in a budget deficit of more than 12.8 billion U.S. dollars, a foreign debt of about 50 billion dollars, and a drop in foreign currency reserves of 18.9 billion dollars -- from 36 billion dollars in January 2011 to 17.1 billion dollars in January 2014, according to official reports.

Hamdy Abdel-Azim, an economics professor at Sadat Academy, believes that the new government will use economic "analgesics" and "pain-killers" to relieve specific issues such as the workers' wages, power outages and fuel shortage.

"The new government is unlikely to make a real economic change due to the limited time and the accumulative economic issues," Abdel Azim said.

He noted that Mahlab's government will continue its predecessor's plan to boost economy by injecting about 4.87 billion dollars as a second stimulus package since last August.

Mahlab's government comes to office at a very decisive stage, when military chief Abdel-Fattah al-Sisi, who led Morsi's removal and set forth a post-Morsi future roadmap, has become the center of media and public focus with a lot of voices calling on him to run for presidency.

Despite speculations that Mahlab's government will face a lot of pressure, experts say it might as well be excused by the public as "still a new cabinet."